Bucking the Deficit: Economic Policymaking in America

Bucking the Deficit: Economic Policymaking in America

Synopsis

Everywhere these days the talk is of money. Candidates promise more jobs, lower taxes, less government spending, and a smaller federal deficit. 'Everything you wanted to know about the American political economy. Political scientists, legislators, lobbyists, and bond trader should buy this book.' - Darrell M. West, Brown University.

Excerpt

Everywhere these days the talk is of money. Candidates promise more jobs, lower taxes, less government spending, and a smaller federal deficit. Political leaders wrangle endlessly over budgets. Even issues such as crime, health care, welfare reform, and foreign policy quickly evolve into money matters: How much should we spend, how much can we afford?

The simple reality is that no one can begin to understand contemporary politics without first learning about the relationship between government and the American economy. Although America's economy remains one of the freest in the world, the twentieth century has changed it significantly. the federal government now spends more than 20 percent of the money that circulates through the economy each year. the government regulates nearly every industry and many business practices. American banks are privately owned, but the government dictates many of their practices. American citizens drive on roads built with government funds, talk on telephones regulated by government agencies, send their mail through the government's post office, and pay sizable chunks of their earnings in government taxes. the modern economy and the modern polity grow ever more entangled.

In this book, we offer students of American politics an introduction to the American political economy. This is a broad and complex subject, and we have not covered every aspect of it here. But the chapters that follow will help to acquaint readers with the principal concepts, the most prominent theories, the primary processes, and the language of American economic policy.

Chapter 1 focuses on the basics: the character of the American free market economy, how markets form and wealth is accumulated, the role of money, and the impact of government economic decisions. in the second half of the chapter we explore the economic theories that have shaped policymaking in the twentieth century: classical liberalism, Keynesianism, monetarism, and supply- side analysis.

Chapter 2 offers an overview of economic policy development during the past century, a century of gradual but sweeping economic changes. Chapter 2 focuses on the critical turning points: the Populist and Progressive movements . . .